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Functions, Benefits, Types, Examples [LENGKAP]

Definition of Insurance

The word "insurance" comes from English, namely "insurance" [insurance] which means "insurance". In a broader sense, insurance is an agreement or an agreement between two parties, namely the insurer (insurance company) with the insured (customer or policy holder) where the customer is obliged to pay premiums / contributions.

Whereas , the insurance company is obliged to provide a full guarantee (compensation) to the customer if something happens to the customer or his property based on an agreement previously made.

Apart from the explanation above, the definition of insurance is also contained in KUHD article 246 where insurance or coverage is an agreement by which the insurer binds himself to the insured by receiving a premium to provide compensation for him due to loss, damage or loss of expected benefits which he may suffer as a result of an (uncertain event).

 insurance types [1 9659003] In order for you to better understand what insurance is, you should also understand the notion of insurance from the view of experts. Following below are some insights of insurance according to experts.

1. Subekti

According to Subekti (2001), the notion of insurance is an agreement included in the type of chancy agreement where this agreement is intentionally based on an event that does not necessarily occur later, which event will determine the profit and loss of one party.

2. Emmy Pangaribuan

According to Emmy Pangaribuan (1992), the notion of insurance is an agreement where the insurer by enjoying a premium ties himself to the insured to free himself of losses due to loss, loss or absence of expected benefits that will be suffered by an event uncertain.

3. Abbas Salim

According to Abbas Salim, the notion of insurance is a willingness to determine small or little losses that are certain as a substitute (substitution) for large losses that are not certain to occur in the future. So that it can be concluded that people are willing to pay a small loss for the present in order to deal with large losses well.

Insurance Function and Benefits

 understanding of insurance and insurance benefits

The next discussion is a function and insurance benefits. In general, the function of insurance is as a means of transferring the possibility of a risk or loss to one or several insurers that are insurable [1945909]. The insurance function itself is divided into 2 types, namely primary and secondary functions.

1. Primary Function

a. Risk Transfer Facility

Insurance functions as a means of transferring the possibility of risk or loss from the insured (Original Risk Bearer) to one or several underwriters (a risk transfer mechanism). With the existence of insurance, the possibility of a risk can be minimized or even prevented.

b. Funds Collection Facility

Insurance companies function as a means of collecting funds from the public (policy holders) where the funds will be given to those affected or invested in various other business fields to be more productive. The funds collected are premiums or fees paid by the insured party to the insurer.

c. Balanced Premium

Insurance makes potential losses or risks can be shared with other parties. In other words, customers can pay a premium that is balanced with the risk transferred to the insurance company or underwriter [equitable premium] .

2. Secondary Function

a. Increasing Economic Growth

With insurance, entrepreneurs do not need to feel too anxious if there is an unwanted risk. That way, they can be more focused in developing their business and also operational. In short, insurance can help increase business prevent and control losses and can become savings.

b. Covert Export Facilities

Insurance also serves as a means of covert sales or exports of non-tangible commodities or goods abroad.

Types of Insurance

Insurance consists of several types that are tailored to their functions and objectives . The following are some of the types of insurance you need to know.

1. Life Insurance

 life insurance

Life insurance is a type of insurance that provides protection or coverage to a customer who suffered financial losses due to the risk of death or life too long.

Some insurance policies will provide payment after death of the insured, while some others allow the insured party to claim funds before his death. Examples are protection or long-term coverage to the heirs of the policyholders who have died.

2. Health Insurance

Health insurance is a type of insurance that provides coverage relating to health problems experienced by the insured as caused by illness or accident. The insurance company will guarantee the costs of medical treatment and care for the insured such as the cost of medication, hospitalization and surgery.

3. Educational Insurance

Educational insurance is a type of insurance that provides education guarantees to the insured so that parents (policyholders) do not need to worry about continuing their children's education. Generally, this educational insurance premium is paid from the time the child is born to a certain time limit in accordance with the agreement. The amount of premium costs also depends on the insurance company and the desired level of education.

4. Business Insurance

Business insurance is a type of insurance that guarantees to a company in the event of a risk or loss that causes loss, damage and others.

5. Vehicle Insurance

Vehicle insurance is a type of insurance that guarantees protection or coverage from the insurer to the insured party in the event of loss or damage to the insured's vehicle such as caused by loss, accident, etc.

6. Home and Property Ownership Insurance

Home ownership and property insurance is a type of insurance that guarantees protection or coverage to the owner of the house or property in the event of damage, loss to the house and also the property of the owner.

7. Old Age Insurance

Old-age insurance is a type of insurance that guarantees that the insured will receive income during retirement and also to his family if the insured dies.

8. Syariah Insurance

Islamic insurance is a type of insurance that protects and also helps each other among a number of people through investments in the form of assets and / or tabarru 'which provide a pattern of returns to face certain risks through contracts that are in accordance with sharia.

9. Credit insurance

Credit insurance is a type of insurance that aims to protect banks or other financial institutions from the possibility of not getting back the loans borrowed by customers and also help provide credit direction and security.

10. Travel Insurance

Travel insurance is a type of insurance that guarantees all losses and inconveniences that occur during a trip such as flight delays, loss of luggage, accidents, or illness.

11. Insurance Losses

Loss insurance is a type of insurance that handles losses in a business. This type of insurance is known as "Non-Life Insurance" [1945909] and has been regulated in Law No. 2 of 1992 .

As for the example of this insurance, among others: fire insurance that will provide protection against losses due to fires in offices, homes, hotels, etc.

Examples of Insurance

 application form

What are some examples of insurance? The following are some examples of insurance.

  • For example in insurance, for example, fire insurance that bears losses due to fires in certain locations such as offices, homes, hotels, and others.
  • To guarantee protection or goods coverage – marine goods such as ships, cargo and others, can be used for marine insurance ( marine insurance .
  • You can guarantee children's education through insurance education.

There are various insurance companies in Indonesia such as :

1. AIA Financial

PT AIA Financila was previously named PT AIG Life which was amended in 2009. PT AIA Indonesia is a subsidiary of AIA Group. This company is one of the well-known life insurance companies in Indonesia and registered with and supervised by the Financial Services Authority.

2. Allianz

Allianz opened a representative office in Indonesia in 1981. Then, in 1989, Allianz founded PT Asuransi Allianz Utama Indonesia in the form of a general insurance company. Subsequently, in 1996, Allianz founded PT Asuransi Allianz Life Indonesia.

3. AXA Mandiri

Beginning with a life insurance business in 2004, AXA Mandiri finally built a general insurance business in 2011. AXA Mandiri in Indonesia is a subsidiary of AXA Group, one of the largest insurance and asset management companies in Indonesia. world.

Well, hopefully the discussion on the definition of insurance along with its functions, benefits and types of insurance along with examples as described above is useful. Thank you!

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